One day last month, Stephen Williams asked a passerby for help and then collapsed on the sidewalk. When the ambulance arrived in downtown Honolulu, his temperature was well over 104F.

A life-threatening staph infection had entered his bloodstream. Williams, who lives on the dusty streets of Chinatown, spent seven days hooked to an IV, treatment that can cost $40,000, according to the hospital that admitted him. But Williams didn’t pay: the bill was covered by government dollars in the form of Medicaid. Over the past four years, he has been to the hospital for infections 21 times, he said, a consequence of psoriasis flare-ups in a humid climate and unsanitary conditions.

Cases such as these have prompted a groundbreaking new proposal in Hawaii. Instead of prescribing medication to homeless patients like Williams, what if doctors could prescribe something else that might ameliorate their health problems more effectively? The prescription would be housing.

With this aim in mind, a state senator, Josh Green, has introduced a bill to classify homelessness as a medical condition. Green, who is also a physician, said the idea originated in his own work in the emergency room, where he saw many homeless patients arrive for treatment of basic conditions at great expense, but no real long-term benefit. “I’m really just applying a band-aid,” he said of his medical work. “But these problems require intensive long-term support.”

A small number of homeless people require a disproportionate amount of medical treatment. According to Green, a recent internal study by a major Hawaiian insurer found that over half of the state’s $2bn Medicaid allotment was consumed by a tiny fraction of users, many of whomare dealing with homelessness, mental illness and substance addiction.

Yet research suggests that healthcare spending for those who have been homeless for long periods and struggle with mental illness and addictionsfalls by 43% after they have been housedand provided with supportive services. Green said many of the individuals he hopes to house cost the healthcare system an average of $120,000 annually, yet the annual cost to house an individual is $18,000. He thinks that the total savings to the state could be hundreds of millions of dollars a year.

As envisioned by Green, doctors could prescribe housing on a case-by-case basis. In order to qualify, the patient must have been homeless for at least six months and suffer from mental illness or a substance addiction.

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“We’re already spending the money on homeless people, we’re just paying for it in the most inefficient, expensive way possible,” he argued. “We have a lot of capacity, but lack the political will.”

The bill is winding its way through the state legislature, and faces a key vote this week. It has already found supporters. “I think this bill is a great idea,” said Daniel Cheng, an emergency room physician at the Queen’s Medical Center in Honolulu. Last year, treatment for homeless people at the hospital cost $90m. “When emergency medical services are being heavily overused by a population that’s being poorly served, it costs everybody,” Cheng added.

Cheng said he most commonly sees homeless patients for the treatment of psychiatric issues, infections, problems related to substance abuse and general medical concerns such as a stomach ache or chest pain. Often, patients return re-infected just a week after he treats their wound, he said. “Instead of paying for an antibiotic, let’s take that $5,000 visit and pay for housing. We’d be way more ahead.”

In Cheng’s eyes, hospitals are already expected to pick up the tab for societal ills. “We’ve clearly seen the medicalization of social problems like alcoholism and homelessness,” he said. “People who are intoxicated no longer go to a rehabilitation facility, they come to the hospital. It’s become a medical treatment.”

But not everyone agrees that homes should be part of the pharmacopeia. In testimony last month, the Hawaii department of human resources development, which oversees various social services, suggested housing is beyond the healthcare system’s remit and expertise.

And there are concerns that such an approach might spread the state’s resources too thinly. “There is a population of homeless [for whom] it is clearly a medical condition – the substance abusers and the mentally ill,” Bob McDermott, a Republican lawmaker, was reported as saying last month. “But other than that, it seems to be a stretch.”

Honolulu’s largest homeless services provider agrees. “You don’t want to broaden it so much that everyone is eligible,” warned Kimo Carvalho, a spokesman for the Institute for Human Services. He said he is in favor of the bill but that without strict parameters, healthier homeless individuals could take advantage and drain the system.

Another concern: walkouts. “If you give mentally ill people housing, nine out of 10 will just walk away and go back outside,” Carvalho said. He added that he thought the best use of Medicaid was targeted housing for people with specialized needs, such as mental health group homes, or addiction recovery housing, because many of the neediest clients targeted by Green’s bill might refuse accommodation.

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One such woman was perched outside a drugstore in downtown Honolulu recently, fumbling with the strands of her turquoise muumuu. A homeless-services coordinator, Justin Phillips, who works in the surrounding area, said the woman is frequently transported to the hospital for psychiatric treatment after good Samaritans find her wandering in the middle of busy streets, unable to communicate.

Despite high costs to the medical system, she has declined shelter for years, Phillips said. She assaulted the last caseworker who offered her assistance, and was recently released from the overcrowded state mental hospital.

“Until she gets medication, she’s not stable enough to live in housing, and even then she’s going to require a higher level of care,” said Phillips.

Whatever the case, the bill seems like a no-brainer to some of those dealing with poor health in hard circumstances.

Williams, the man who suffered from the staph infection, rested his swollen legs on a brick wall on the outskirts of Chinatown.

“It’s very clear to me,” he said. “If I could get a place to stay, I wouldn’t have to go to the hospital so often.”